MyCarrier, the Scottsdale, Arizona-based LTL booking platform, is growing revenue rapidly and shipments count fast after a significant inflection point in the company’s business plan.
Founded in 2017 by GlobalTranz veterans Michael Bookout and Chris Scheid, MyCarrier raised an $8 million Series A round in March 2021. The platform’s vision was to connect small and medium-sized shippers to LTL carriers, returning automated quotes based on user-provided shipping features, such as enabling fulfillment of reservations with electronic bills of lading, enhanced visibility, insurance, and dynamic payments.
If MyCarrier looks like a relatively normal transportation management system, even though it serves the highly analog world of small LTL shippers, that’s because it is. But the secret of MyCarrier’s success, in addition to the quality of its technology, lies in a unique distribution model and a pioneering monetization strategy. In other words, while MyCarrier is leading the charge in LTL connectivity and electronic waybill technology, it is also innovating a new business model that the rest of the FreightTech industry can learn from.
When MyCarrier launched, its main paying customers were various premium LTL carriers, not SMB shippers. The idea was simple: if MyCarrier could achieve critical mass on its platform and build robust integrations with carriers, the superior data quality of its electronic BoLs would enable a degree of automation and flexibility that would generate huge efficiencies for carriers. And carriers would be willing to pay for those gains.
“MyCarrier was founded to be the ubiquitous platform that instantly connects customers and carriers, without barriers, to power the future of the supply chain,” said Scheid, president of MyCarrier. “From the beginning, our mission has been to deliver ground-breaking technology that streamlines the carrier and shipper experience to create exceptional business and customer outcomes.”
MyCarrier CEO Bookout added, “Our vision and approach, working closely with carrier partners and customers, is helping to break down the technology fears previously seen in the SMB market. SMB senders know they need to evolve, but they’ve been left behind by most solutions on the market today. Fortunately, the active participation of our customers and carrier partners helps us deliver innovative freight management solutions and accelerate technology adoption.
But how can a software startup quickly scale distribution in a fragmented, low-tech market like SMB shippers, full of customers who aren’t spending a lot of money on shipping in the first place? MyCarrier built versions of its TMS that could be white-labeled by carriers and distributed by LTL carriers’ external sales forces. Old Dominion Freight Line, for example, has about 250 outside salespeople who regularly visit shippers. These types of carrier salespeople who roam their territories by pounding the pavement are now distributing MyCarrier’s software to SMB shippers as part of their freight sales process.
Leveraging carrier sales forces has enabled rapid market growth for MyCarrier, which increased the platform’s shipments 52% year-over-year to 514,400 shipments in the second quarter of 2022. The number of active senders in the second quarter increased 57% year over year to 5,162.
But this strategy only works when the software provider truly creates value for both sides of the market – shippers and carriers, explained Travis Rhyan, Chief Product Officer at MyCarrier. (Rhyan was previously a product manager at FreightWaves.)
“MyCarrier has just begun its journey, delivering strong value to carriers and shippers,” Rhyan said. “MyCarrier is uniquely positioned, with a large shipper base and over 99% of common carriers onboarded to the platform. Additionally, our platform’s shipping volume, on target of 2.5 million shipments this year, will allow our platform to provide unprecedented predictive insights to both parties. Not only can we dramatically streamline the workflow “from quote to order to invoicing”, but we can add services to the platform while extracting data-driven insights for relevant parties.
“Ultimately, MyCarrier will transform and accelerate operational maturity for both parties, improving automation for the carrier and streamlining workflows for the shipper.”
We’ve seen other FreightTech startups build free technology for one side or the other of the market to accelerate market growth and improve trading liquidity. Uber Freight has created free fleet management software for small fleets to help dispatchers assign Uber Freight loads to drivers and manage their trips. Convoy built a TMS for small and medium shippers, largely for the same reason as MyCarrier – because digitizing and standardizing data formats and document workflows is a necessary first step towards automation.
The challenge has always been to monetize the TMS or portal once it’s built. Otherwise, FreightTech startups could find themselves in the position of building and supporting a software platform with thousands of users for free while having to settle for relatively low take rates on transactions on their marketplaces.
Building software is expensive, but it can be justified by high-quality subscription software revenue that capital markets value at a high multiple. By creating software once and selling it many times, software companies end up making very high gross margins because revenue exceeds expenses. Building free software but only receiving a small margin for freight is kind of a trap (especially when adding technical features over time), where a company is forced to bear the cost of building software. engineering and software development without the benefit of scalability. revenue model.
In Q2 2022, MyCarrier began monetizing shippers on its platform, converting its free product to a “freemium” model that charged for additional features, like eBoLs and shipment visibility for off-platform carriers. form, unlimited pickup locations, detailed reports and dedicated support chats.
MyCarrier has already converted more than half of its free users into paying customers and recorded monthly recurring revenue of $675,000 in Q2 2022, compared to approximately $300,000 in Q2 2021. MyCarrier will reach an annual revenue rate of 11 million dollars next time. months, according to MyCarrier Chief Revenue Officer Tommy Barnes, and is expected to more than quadruple its ARR shipper and carrier this year.
“MyCarrier and its go-to-market strategy are built on a strong carrier base. It was useful and necessary for the SME market,” Barnes said. “All other shipping management solutions are one-sided, benefiting a carrier, 3PL, or shippers. MyCarrier is unique, designed from inception to streamline shipping and optimize carrier operations by providing a true digital bridge between the two. Ultimately, both sides win because of the immediate efficiencies and cost saving opportunities it offers to both groups. »
Bookout and Scheid were able to capitalize on what they knew to be the weak points of the LTL industry – low technology adoption, fragmented shipper landscape, small transaction sizes, low middleman value added – to build not only a technological solution, but a business model adapted to respond to this specific market. Since the market structure of LTL is essentially the mirror image of full truckload, with a fragmented shipper community and a consolidated carrier community, they recognized that the quality of inbound shipper data was key to the carrier efficiency.
Now, MyCarrier targets a market with different characteristics and competitive environment: the full truck (and other modes that will soon follow). Small truckload shippers often have a relatively high cost of service due to their erratic shipping schedules, lack of technology and low volumes, but MyCarrier bets it can roll these shippers up on its platform, aggregate volume and present an attractive range of enterprise to large capacity suppliers.
FREIGHTWAVES’ Top 500 For-Hire Carriers list includes Old Dominion Freight Line (#9).